Icon’s income rises; positive but cautious about ‘10

Icon posted a 12 per cent increase in operating income in 2009 but remains cautious about the year ahead after year-on-year net business awards fell in the fourth quarter.

The growth generated by Icon contrasts with the struggles at other contract research organisations (CRO) but despite the positives it has issued lower than expected guidance for 2010.

“While external factors are challenging, and many governments are endeavouring to reduce healthcare costs, including pharmaceutical prices, we remain positive, though cautious, as 2010 commences”, explained Peter Gray, CEO of Icon.

The caution is in part because of the dip in fourth quarter net business awards, down to $229m (€168m) from $261m a year ago. However, it did reverse the quarter-on-quarter decline in book-to-bill ratio. The ratio is now 1.0, although this is still less than 12 months ago, when it was 1.2.

Lauren Migliore, an analyst at Morningstar, is encouraged by the quarter-on-quarter improvement in book-to-bill ratio and believes Icon is performing “relatively well despite operating in one of the worst environments to date”.

Migliore added that her employers “continue to be impressed by the firm's superior execution and are heartened by its efforts to expand operations in new markets, such as the booming Asia Pacific region”.

In the 2009 financial year net revenues increased by three per cent to $888m. A three per cent rise was also experienced in the fourth quarter and this helped operating income increase by 12 per cent to $29.6m. Total costs and expenses rose by less than one per cent to $780m.

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